Question 1

The term non-current account refers to…
A)capital
B)liabilities
C)long term liabilities
D)both (a) & (c)

Accepted Answer

Non-current accounts refer to items on the balance sheet that are not expected to be converted into cash within a year, which includes both capital (long-term investments) and long-term liabilities.

Question 2

Share premium, share forfeited, profit and loss account, balance of profit are the examples of…
A)current assets
B)permanent liabilities
C)fixed assets
D)current liabilities

Accepted Answer

Share premium, share forfeited, profit and loss account, and balance of profit are examples of permanent liabilities or equity accounts, not assets or liabilities. These items represent the financial structure of a company's equity or internal financing sources, rather than its assets or external financing obligations.

Question 3

The funds flow analysis is of primary importance to…
A)personnel management
B)financial management
C)quality control management
D)auditing

Accepted Answer

Funds flow analysis is crucial for financial management as it helps in understanding the inflow and outflow of funds, enabling better financial planning, analysis, and decision-making.

Question 4

Basically, the funds flow statement is considered a tool for…
A)cost control
B)financial analysis
C)performance analysis
D)none of the above

Accepted Answer

The funds flow statement is primarily used for financial analysis, as it helps in understanding the sources and uses of funds over a period.

Question 5

Who uses the funds flow statement widely?
A)financial institutions
B)financial managers
C)analysts
D)all of the above

Accepted Answer

The funds flow statement is used by financial institutions, financial managers, and analysts to assess the financial health and cash flow of a company.

Question 6

Basically, the funds flow statement shows the causes for changes of _________ during a period.
A)assets
B)liabilities
C)both a & b
D)none of the above

Accepted Answer

The funds flow statement is designed to analyze the changes in the financial condition of a business between two points in time. It does so by examining changes in the company's assets and liabilities, thus showing where the funds came from (sources) and where they went (uses).

Question 7

The sources of side of funds flow statement shows the______ sources of funds of a firm.
A)internal
B)external
C)both a & b
D)none of the above

Accepted Answer

The sources of funds in a funds flow statement include both internal sources (like profits from operations) and external sources (like loans or equity financing), hence both A and B are correct.

Question 8

Funds flow statement is a substitute for…
A)income statement
B)balance sheet
C)both a & b
D)none of the above

Accepted Answer

The funds flow statement is not a substitute for the income statement or balance sheet; rather, it complements them by providing additional information about the flow of funds within an organization.

Question 9

Which of following are original statements?
A)funds flow statement
B)financial statement
C)cash flow statement
D)working capital statement

Accepted Answer

Financial statement is an original statement, which includes the balance sheet, income statement, and cash flow statement, providing a comprehensive overview of a company's financial performance and position.

Question 10

Which of the following statement is dynamic in nature?
A)balance sheet
B)funds flow
C)both a & b
D)income statement

Accepted Answer

The answer of Which of the following statement is dynamic...

Question 11

Funds flow statement is complementary to…
A)balance sheet
B)income statement
C)both a & b
D)none of the above

Accepted Answer

The funds flow statement is complementary to both the balance sheet and the income statement. It provides additional insights into the financial operations and health of a business, showing how funds are sourced and used, which complements the snapshot of financial position provided by the balance sheet and the profitability information provided by the income statement.

Question 12

Which of the following is the source of funds?
A)issue of shares
B)raising long term loans
C)sale of fixed assets
D)all of these

Accepted Answer

All the options listed are sources of funds for a company. Issuing shares brings in equity capital, raising long-term loans provides debt financing, and selling fixed assets generates cash, all contributing to the company's funds.

Question 13

Which of the following is an application of funds?
A)funds lost in operation
B)income from investment
C)funds from operations
D)all of these

Accepted Answer

An application of funds refers to the use of funds for various purposes within a business, such as covering losses. Funds lost in operation represent an application because they are funds used (or applied) to cover operational deficits.

Question 14

What is meant by funds from operation?
A)operating profit
B)net profit
C)gross profit
D)all of the above

Accepted Answer

Funds from operation typically refer to the cash generated from a company's operating activities, which is most closely related to operating profit. Operating profit reflects the profit a company makes from its core business operations, excluding non-operating income and expenses.

Question 15

Working capital requirements depends on the credit policy of …
A)the company
B)the suppliers
C)both a & b
D)none of the above

Accepted Answer

Working capital requirements are influenced by the credit policies of both the company itself and its suppliers. The company's credit policy affects how much credit it extends to its customers, which in turn affects its receivables and cash flow. The suppliers' credit policy affects the credit terms extended to the company, impacting its payables and cash outflows.

Quiz 7: Funds Flow Statement and Non-Current Accounts

The term non-current account refers to…

Share premium, share forfeited, profit and loss account, balance of profit are the examples of…

The funds flow analysis is of primary importance to…

Basically, the funds flow statement is considered a tool for…

Who uses the funds flow statement widely?

Basically, the funds flow statement shows the causes for changes of _________ during a period.

The sources of side of funds flow statement shows the______ sources of funds of a firm.

Funds flow statement is a substitute for…

Which of following are original statements?

Which of the following statement is dynamic in nature?

Funds flow statement is complementary to…

Which of the following is the source of funds?

Which of the following is an application of funds?

What is meant by funds from operation?

Working capital requirements depends on the credit policy of …